MPs back plan to block carbon floor price

A $15 price floor on carbon under the emissions trading scheme is in doubt, after key MPs backed a plan to block regulations to introduce it.

Independent Rob Oakeshott flagged last week he might move to disallow the regulations, even though he agreed to them as part of a package signed off by the multi-party climate change committee last year.

The price floor is designed to encourage investment in renewable energy by preventing excessive volatility when the carbon scheme moves from a fixed to a floating price. However, companies have complained the mechanism proposed to implement a price floor – a surrender charge – will make it more costly to buy carbon internationally than domestically.

Regulations to implement the price floor are being drafted by the government, but Mr Oakeshott said it would be “smart politics” for the government to reconsider the price floor.

Katter’s Australian Party’s Bob Katter told The Australian Financial Review he would be likely to support a disallowance motion. “It is good that Rob Oakeshott has come to his senses but it is still imposing a large increase in electricity charges,” he said.

A spokesman for Tony Crook, who formally announced he was joining the Coalition on Saturday, said while he would need to see the terms of the disallowance motion, he would be likely to support anything which “took the pressure of regional Australia”.

If the opposition also backed a disallowance motion, regulations to introduce a price floor would be disallowed 74-73, if Peter Slipper does not resume his role as Speaker. With backbencher Anna Burke acting Speaker while Mr Slipper faces claims of sexual harassment and misuse of cabcharges, Labor loses a vote.

Opposition environment spokesman Greg Hunt would not comment on whether the Coalition would support Mr Oakeshott. “It is entirely hypothetical at this stage,” he said. “It just shows there is chaos in the management of the carbon tax.”

NSW independent Tony Windsor, who was also a member of the multi-party climate change committee, said Mr Oakeshott had not raised the issue with him. “I would be more than happy to talk to him about it [but] an agreement is not the sort of thing I would likely change,” he said.

“But nothing is ever final.”

Climate Change Minister Greg Combet said the government intended to abide by the multi-party climate change committee agreement. “We haven’t brought regulations forward at this stage to implement the floor price,” he said. “I’ll be having some discussions with Mr Oakeshott and others as we develop them.”